Skip Maine state header navigation
OFFICE OF SECURITIES
121 STATE HOUSE STATION
AUGUSTA, ME 04333
NOTICE OF INTENT TO DENY A
BROKER-DEALER AND SALES
REPRESENTATIVE LICENSE, ISSUE
A CEASE AND DESIST ORDER, AND
IMPOSE A CIVIL PENALTY
Olympia Asset Management, Ltd. (“
Michael Patrick Murphy ("Murphy") is the
Chief Executive Officer and the principal owner of
Chistopher Martin Murray (“
On March 31, 2003, the Office of Securities (“Office”)
received an application from
Over the next several months, the Office sent several
Through August 2004,
On September 21, 2004, the Office sent a letter
requesting additional information to
On March 21, 2003, Murphy filed an application through
the Central Registration Depository to be licensed as a sales representative
On December 6, 2004, the Office sent a letter to
Grounds for Denial
10. On December 5, 2003, the National Association of Securities Dealers (“NASD”) issued a Letter of Acceptance, Waiver and Consent (“AWC”) against Murphy, Murjen, and a third respondent based on conduct occurring while Murphy was associated with Murjen and another firm. The NASD found that Murphy knew or should have known that a sales representative under his supervision had engaged in unsuitable margin trading and excessive trading in several client accounts. For this reason, the NASD found that Murphy violated NASD conduct rules by failing both to adequately supervise a sales representative and to observe high standards of commercial honor and just and equitable principles of trade. As a result, the NASD suspended Murphy from associating as a principal with any NASD member for two months. The NASD also imposed a $9,000 fine on Murphy and Murjen and ordered that all three respondents pay over $209,000 in restitution. In a separate action, the NASD suspended the inadequately supervised sales representative for two years, imposed a $20,000 fine upon him, and required him to disgorge over $70,000 in commissions.
11. In the AWC against Murphy, the NASD also stated that Murjen, acting through Murphy, who was responsible for the firm’s written supervisory procedures, failed to establish and maintain a supervisory system reasonably designed to achieve compliance with NASD rules against unsuitable transactions and excessive trading. The NASD listed four specific deficiencies in Murjen’s written supervisory procedures, including failures to describe how principals should review and determine whether margin trading is unsuitable and whether account activity is excessive.
The written supervisory procedures that
On September 16, 2004, the NASD issued an AWC against
In January and February 2003, while Murphy was president
of Murjen, an employee of Murjen named Sean Murphy effected five securities
transactions for a
On or about March 2, 2004,
Based on the AWC against Murphy, securities regulators
in at least two other states –
17. Pursuant to 32 M.R.S.A. § 10313(1)(J), the Securities Administrator may, after notice and opportunity for hearing, issue an order denying a broker-dealer or sales representative license if she finds that the order is in the public interest and that the applicant or “any partner, executive officer or director, any person occupying a similar status or performing similar functions or any person directly or indirectly controlling the broker-dealer” has failed reasonably to supervise sales representatives.
18. Murphy’s conduct as described in the AWC against him constitutes a failure to reasonably supervise sales representatives.
Murphy’s failure to prevent Sean Murphy’s unlicensed
20. Pursuant to 32 M.R.S.A. § 10313(1)(G), the Securities Administrator may, after notice and opportunity for hearing, issue an order denying a broker-dealer or sales representative license if she finds that the order is in the public interest and that the applicant or “any partner, executive officer or director, any person occupying a similar status or performing similar functions or any person directly or indirectly controlling the broker-dealer” has engaged in any unlawful, unethical or dishonest conduct or practice in the securities business.
21. Murphy’s conduct as described in the AWC against him constitutes unethical conduct in the securities business.
Murphy’s failure to ensure that
The unlicensed transaction in
The Securities Administrator believes that it would be in
the public interest to deny
Grounds for Cease and Desist Order and Imposition of Civil Penalty
26. Pursuant to 32 M.R.S.A. § 10602(1), if the administrator reasonably believes that any person has engaged, is engaging or is about to engage in any act or practice constituting a violation of any provision of the Act, she may, among other things, issue a cease and desist order and impose a civil penalty that may not exceed $1,500 for a single violation.
By effecting a securities transaction in
Pursuant to 32 M.R.S.A. § 10708(6), notice is hereby given that the Securities Administrator intends to issue an Order to Deny a Broker-Dealer and Sales Representative License, Issue a Cease and Desist Order, and Impose a Civil Penalty pursuant to 32 M.R.S.A. §§ 10313(1) and 10602(1).
Pursuant to 32 M.R.S.A. § 10708(2), interested parties have thirty (30) calendar days from the entry of this Notice of Intent to file a written request for a hearing.
Date: December 20, 2004 s/Christine A. Bruenn
Christine A. Bruenn
Date: December 20, 2004 s/Bonnie E. Russell
Bonnie E. Russell
Assistant Securities Administrator
Date: December 20, 2004 s/Michael W. Atleson
Michael W. Atleson